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reported fiscal fourth-quarter earnings that edged the Street's consensus estimate Wednesday thanks to record operating income and revenue. But the first-quarter guidance on the company's conference call came up shy of estimates and weighed heavily on shares.

Chairman and CEO John Chambers crowed that the company hit the upper ends of its guidance or better on almost every metric and generated $4 billion in cash flow. "My confidence in our ability to be the #1 IT Company is increasing," he said in the earnings release.

Cisco earned 52 cents per share, a penny better than consensus, with net income of $2.8 billion. Including a charge for settling patent litigation with , stock compensation expenses and the amortization of intangible assets tied to acquisitions, Cisco earned 42 cents per share and posted net income of $2.3 billion.

Revenue was up 6% from the prior year in the May-July period, coming in at $12.4 billion, in line with estimates. Gross margin may have been one catalyst for the stock's softness after the results, falling to 59.2% from 60.6% a year earlier. The company noted that adjusted gross margin was 62.1%.

Cisco paid $918 million in cash dividends, 17 cents per share, during its fiscal fourth quarter, and repurchased $1.2 billion worth of stock, or 47 million shares at an average of $24.80 each.

For the full year Cisco earned $2.02 per share ($1.86 on a GAAP basis) on $48.6 billion in revenue.

The stock stumbled in after-hours trading, but things got worse during the company's conference call, on which Chambers said the "mixed and inconsistent" economic recovery is on a trajectory he does not see changing.

Cisco's guidance called for fiscal Q1 revenue growth of 3-5%, implying a range of $12.2 to $12.5 billion, compared with a consensus call closer to the upper end of that range at $12.45 billion. Earnings are expected at 50-51 cents, while Wall Street expects 51 cents. The company also says it will lay off around 5% of its workforce, cutting about 4,000 jobs and taking a charge of $250-$300 million.

Up more than 34% this year through Wedensday's close, Cisco shares dropped 10.1% at $23.71 after hours.